Wake Up, Philippines!

RP may raise deficit ceiling to P178 billion

Posted in Department of Finance/DOF by Erineus on February 25, 2009

MANILA, Philippines – The government may raise its budget deficit ceiling for 2009 to P178 billion from P102 billion because of the need to spend more this year, Finance Secretary Margarito Teves said yesterday.

Teves said the revised ceiling, equivalent to 2.2 percent of gross domestic product (GDP) and 74.5 percent higher than an earlier revised target, “is manageable.”

Originally, the government had a deficit ceiling target of P40 billion for 2009.

“A deficit which is 2.2 percent of GDP is still manageable,” Teves said.

Socioeconomic Planning Secretary Ralph Recto has said that chances are high that the government will revise downward the higher end of its GDP growth target range of 3.7 percent to 4.7 for 2009 because of the difficult global economic tide.

Recto said the government needs to work on raising revenues and improving its revenue-to-GDP ratio. He also said that a budget deficit which is equivalent to two percent of GDP is still comfortable.

Government sources also said the DBCC has recommended a downward revision in the collection targets of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC).

Originally, the BIR is tasked to collect P968.3 billion this year from a goal of P845 billion last year. Earlier, BIR deputy commissioner Nelson Aspe said the agency likely collected only P785 billion in 2008.

The BOC, for its part, has a revenue goal of P317 billion for 2009 as against the P254.4-billion collection target for last year.

The yearend budget deficit target is also expected to swell to P161 billion or two percent of GDP from the already revised ceiling of P102 billion.

Exports are expected to contract by eight percent this year from a previous growth target of one percent to three percent.

The economy, as measured by GDP grew by 4.6 percent last year, from a 30-year high of 7.2 percent recorded in 2007 as the country struggles to grow amid a global financial crisis.

The 4.6 percent growth for 2008 is within the DBCC’s revised economic growth assumption of 4.1 percent to 4.8 percent for last year and slightly above the National Economic and Development Authority’s (NEDA) initial estimate of 4.2 percent to 4.5 percent.

By Iris C. Gonzales
Updated February 25, 2009 12:00 AM
http://www.philstar.com/Article.aspx?articleId=443241&publicationSubCategoryId=66
View previous articles from this author.

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